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Catastrophe bond issuance grows by $650 million in third quarter


The $650.0 million of catastrophe bond issuance in the third quarter of 2015 constituted the fourth-highest third quarter on record, according to a GC Securities report on quarterly catastrophe bond activity released Monday.

GC Securities’ “Catastrophe Bond Update: Third Quarter 2015” showed the $650.0 million in third-quarter issuance bringing this year’s total catastrophe bond issuance to $4.5 billion. This brought the total for catastrophe bonds outstanding to $21.71 billion, down 4.7% from year-end 2014, according to the report.

While over 70% of outstanding catastrophe bonds are exposed to U.S tropical cyclones and earthquakes, according to Cory Anger, global head of ILS structuring at GC Securities in New York, the company expects to see greater diversity next year.

“Although these perils in particular continue to drive the ILS market, we expect that 2016 will see new perils, new geographies, new types of protection structures and new sponsors emerge,” Ms. Anger said in a statement.

Separately, Hamilton, Bermuda-based Aspen Reinsurance, part of Aspen Insurance Holdings Ltd., has renewed its Silverton Re Ltd. catastrophe bond for $125 million, up from $85 million in 2014, the company said in a statement Monday.

Silverton Re was established in December 2013 to provide additional collateralized capacity to support Aspen Re’s global reinsurance business, the company said.

Silverton Re will enter into a quota share retrocession agreement with Aspen Bermuda Ltd. and Aspen Insurance UK Ltd. to reinsure a proportionate share of Aspen Re’s property catastrophe excess of loss portfolio, the statement said.